Republicans are barreling ahead to try to pass President Donald Trump’s “one big, beautiful bill” — legislation that somehow manages to combine massive fiscal irresponsibility with devastating spending cuts.
The bill would keep the “Trump tax cuts” originally passed in 2017 in place, while adding some new tax breaks and new spending on immigration enforcement and the military.
It would also make deep cuts to government spending on Medicaid, the clean energy industry, student loans, and food stamps, though exactly how deep these cuts will be isn’t yet clear, as the GOP continues to debate the bill.
Yet under any scenario, these cuts will be insufficient to get anywhere near covering the bill’s massive cost — one estimate suggests it will add $3.9 trillion to the debt.
Republicans are trying to rely on only their party’s votes to pass it through Congress and hope to send it to Trump’s desk this week. Democrats are uniformly opposed.
On Monday, the Senate began considering amendments on its version of the bill (the House passed its own version last month). But much remains unsettled as they attempt to hammer out a final compromise.
Why does Trump want to pass this bill so much?
Trump is pushing hard to ram this bill through because he wants to take care of four things at once.
First, if Congress does nothing, the lower income tax rates Trump signed into law in 2017 are set to expire at the end of this year. That would mean higher taxes for practically everyone — a political disaster.
Second, the bill fulfills a few Trump campaign promises by creating some tax breaks, such as new tax deductions for tip wages and overtime pay.
Third, the bill includes new spending on immigration enforcement (such as Trump’s border wall) and certain military priorities (like his planned “Golden Dome” missile defense shield).
Fourth, the bill raises the US debt ceiling — the limit on new debt the government can issue, which Congress periodically squabbles over raising — by $5 trillion.
Who gets hurt by the bill
All of this tax cutting and new spending is very expensive — it amounts to about $5 trillion over the next decade. So the bill also does some spending cuts: about $1 trillion. These cuts are overwhelmingly targeted at Democratic or liberal-coded priorities and constituencies.
For one, Medicaid would be cut deeply — perhaps by as much as 18 percent, due to new work reporting requirements and other changes that the Congressional Budget Office estimates would push 12 million people off the program.
The clean energy industry would also be hammered. The current Senate bill not only rolls back Biden-era tax credits but also imposes a painful new tax on wind or solar projects using Chinese components.
Student loans and food stamps are the other areas that would face particularly steep cuts.
The exact extent of all these cuts is yet to be determined. Some in the GOP are seeking to soften the Medicaid and clean energy cuts at least somewhat, but conservative hardliners are pressing to slash spending even more.
The public spectacle this week will be on the Senate floor as amendments get votes, but the real action will happen behind the scenes as GOP leaders attempt to cut a deal that can win over nearly every House and Senate Republican.
